The Most Promising Buyout Prospects

Goldman Sachs names the publicly traded companies that offer the best opportunities for buyout firms

You've heard, undoubtedly, of the boom in buyouts of U.S. companies. The deals come almost every day, with billions of dollars on the line. But how can investors participate in the buyout boom? Is there a way to anticipate where the next deals are likely to occur?

Certainly, there's no foolproof formula. But there are a few factors that can help determine which companies may be put in play next. Goldman Sachs sifted through publicly traded stocks to try to figure out which ones offered the most promising opportunities for buyout firms, so that other investors could anticipate deals and profit from them.

The firm's analysts assumed that any acquirer would pay a 20% premium to the current stock price, since that is roughly what has been paid in the past. Then it calculated the potential returns for each company. The possible profits can be enormous—more than 70% over five years for companies like supermarket chain SuperValu and oil company Sunoco.

Here's a look at the deals that Goldman thinks could be on the horizon.Source: Goldman Sachs Group